Elected to a three-year term as great khan of the Khitans, Abaoji refused to resign at the end of his term but made himself king of the Khitan nation. After the collapse in 907 of Tang rule in China, Abaoji made himself emperor and by 916 had set up a Chinese-style dynasty, with his son as heir apparent. He organized his followers into fighting units known as ordos (similar to what Westerners later called a horde) and then joined 12 ordos into an administrative district.

In 936, in return for aiding the founder of the Hou (Later) Jin dynasty (936–946/947) in the Jin ruler’s conquest of North China, Abaoji’s son was given the northeast corner of what is now Hebei province, an area inside the Great Wall encompassing the present site of Beijing. Afterward the Khitans began to take on further Chinese mannerisms, and in 947 they proclaimed the Liao dynasty (907–1125), naming Abaoji as their dynastic founder with the posthumous title of Taizu (“Grand Progenitor”).

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